This is the time of year that we see a multitude of insurance advertisements in the media, most of which are related to Medicare’s Annual “Open Enrollment” period. This is the time to look at comparing Part D prescription plans or Medicare Advantage plans to decide if you want or need to change to a new plan for January 1, 2018.
This is also a good time to evaluate whether or not to stay on a “Medicare Advantage” plan or go back to “Original” Medicare and have a Supplemental plan to pay or help pay the portion that was left when Medicare only paid 80 percent of the bill. The differences between Medicare Advantage plans and Original Medicare are noteworthy. By the way, it’s called Original Medicare because it came first, like the fried chicken that’s called “Original Recipe”. (In this example, Medicare Advantage would be the “Extra Crispy” version because it came out later!) Here are some of the bigger differences:
Original Medicare and Supplemental insurance have no networks so you can go to any doctor or clinic that accepts Medicare.
Medicare Advantage (aka Medicare HMO and/or PPO plans) have limitations about where you can use your plan because it’s not accepted by all doctors and clinics for several reasons.
Original Medicare and Supplemental insurance doesn’t care where you travel to. It covers you wherever you go in the states.
Medicare Advantage plans have geographic boundaries, usually county borders. It may not work the same or at all while traveling away from home.
Original Medicare with Supplemental plans let you decide and schedule directly with a specialist, who might be located 7 states away, but could save your life.
Medicare Advantage plan have the “Primary care” physician decide if you need a referral to a specialist. Even then, it may not be the specialist you researched if he/she is not accepting the MA network’s terms.
You are instructed not to use your Red, white and blue Medicare card when you are on a Medicare Advantage plan, because your benefits are not coming through the Medicare system. Benefits come from a company contracted (read paid) by the federal government. Instead, you would use a card that says something like “Joyce and Ted’s Purple Sword Health System of Albuquerque… a Medicare Advantage plan”. In this imaginary example, Joyce and Ted’s Purple Sword Health System of Albuquerque network is paid a set amount of money by the government each month to give benefits similar to “real” Medicare benefits. This means that the “real” Medicare system (federal government) does not have to pay any benefits to someone on this plan while they are on it. In short, the federal government pays a company to take over the risk/responsibility of paying when a person with a Medicare Advantage plan gets sick or hurt. And “Joyce and Ted’s Purple Sword Health System of Albuquerque…a Medicare Advantage plan”, is only paid a small, set amount by the government for each person on it, each month. So naturally, Joyce and Ted’s Purple Sword Health System limits where, when, and what it’s policyholders can do… because it is in business to make money. Original Medicare is NOT FOR PROFIT. And the supplemental insurance companies are only involved in paying their 20% portion. They are NOT making decisions about what doctors you can see or setting limits on you. This is the main difference and it’s gigantic.
So be careful. Have an expert help you compare the different types of plans. The type of plan you have may be critically important later on when your health has changed. Usually when your health is compromised, it is too late to switch to Medicare supplemental type plans because there is no Annual Open Enrollment period for supplemental insurance. Generally, the only time you are guaranteed to be accepted, even with poor health, is when you first take Medicare Part B at age 65, or sometimes later if you are on working and on employer group benefits past age 65, and take Part B at age 68 at retirement, for example. It’s painful to have to give tearful clients the bad news that they missed their opportunity to switch because their health is compromised.